Downtown L.A. — it's not a punchline anymore; it's a destination. It's vital in a way it hasn't been since the 1940s, and hip in a way it never was to begin with. Carol Schatz, president and CEO of the Central City Assn. of Los Angeles, has pushed and prodded the makeover, wielding what the CCA calls L.A.'s most powerful Rolodex. It hasn't been friction-free. Now, in the conflict over homeless people living on downtown streets, Schatz is the voice of the CCA's business leaders, and the face of the enemy for some homeless advocacy groups.

We passed the "adaptive reuse" ordinance in 1999. That was a CCA initiative, making downtown a destination for housing. That, and the opening of Staples Center in 1999. Staples gave people a reason to come downtown. They opened with Springsteen. I'll never forget walking down Fig [for the inaugural concert] and seeing thousands of people walking along the street. I had never seen that before.

Was there a natural appetite for a real downtown, or did you have to make water flow upstream?

When I became CEO [of CCA] in 1995, I would walk around these streets and say to myself, Carol, this is not coming back. This is dead. But I'm not good at accepting defeat. We had to get out of the [1990s] recession first. When I went to other cities, I realized the difference was converting office buildings into housing. So I stole the idea from New York, where they had started adaptive reuse in lower Manhattan because they considered themselves a 9-to-5 downtown. Isn't that hilarious?

[L.A.] really grabbed onto this. The ordinance gave developers an incentive, and they took many historic buildings and brought them up to code and restored them.

The Times just identified about 1,500 potentially earthquake-vulnerable concrete buildings in L.A. How does that affect downtown?

I asked an engineer how many buildings downtown may be at risk, and he said, "Nobody knows." You have to do a complicated, expensive test to determine it. But over 60 buildings, many of them at-risk concrete, were retrofitted through the adaptive reuse program. They are functioning, healthy buildings that meet all current seismic codes.

The most dangerous ones may still be out there. It's important to incentivize property owners to do the right thing, but the entire risk and cost should not fall on them. If they can't make any money because the retrofitting is so expensive, they'll walk away. Think about the risk if they become abandoned buildings. Then you've created blight.

Are you attracting Westsiders to downtown?

When I started this work, I considered La Brea the Maginot Line. If you lived on the Westside — and I live on the Westside — you just didn't go east of La Brea. That's changing. Frankly, it was the bars, restaurants and clubs. I knew we had arrived when you [The Times] did a fold-out about downtown as the new restaurant destination. They're coming if there's a show at Staples, they've been coming for MOCA, and they'll be coming when the Broad [museum] opens too.

I was in the Apple store in Century City and [the clerk] asked me what I did. I told him and he said, "Oh, man, I'm downtown all the time now — a lot of my friends are living downtown."

Did you ever meet a downtown project you didn't like?

We had to negotiate heavily with Tim Leiweke and AEG when they were building L.A. Live. We did not like the first design — a solid wall that was going to face Figueroa. I said to them: "This whole development was supposed to turn the lights on all over downtown; you have to integrate this with the rest of the community." We put together a committee; many members of our association. Yes, it's enlightened self-interest, but they do have a strong commitment to making sure we build a vital downtown. We were all concerned about this fortress-like proposed building. Leiweke was not happy, but I think if you called him now, he would say it made the project a lot better.

Adaptive reuse hasn't created the displacement controversies, like gentrification in, say, Echo Park, but there's a very old Latino business district on Broadway. How can you balance that?

That's the beauty of this renaissance — we may have displaced a couple of pigeons, but that was it. What's happening on Broadway I think will ultimately be a mix. I don't think we're going to see a bunch of galleries and super-hip, really expensive boutiques and all that.

Why is there still no Trader Joe's?

Do you know how hard we've tried? In every demographic survey, we've asked, "What is the one store you want?" And it's always Trader Joe's. We've sent them the survey; we've shown them the changes; they haven't shown an interest. That being said, [other retailers] have figured this out. Target hits it out of the park every day.

If downtown is about a mix, why did your group oppose an affordable-housing measure?

It was 2002, and we were beginning to see the seeds of interest from developers. It was a huge risk to [do] adaptive reuse or build condo high-rises. Had you imposed that huge mandate, it would have killed any interest in housing downtown. We said we would agree to inclusionary zoning around transit stations and long transit corridors; that way you have real transit-oriented development. We said we would commit to a certain percentage of low-income units [if] the city allowed the developer to go beyond the six-story limit across the city. The bottom line was that our wonderful City Council members, including those proposing it, would not stand up to their neighborhood councils.

What did you think when the Occupy movement made you into one of its villains?

Ah, I don't even want to think about that!

Downtown seems to be doing fine without an NFL team.

A new stadium will be another economic generator and booster. My understanding is that negotiations are underway, that AEG and Mr. Anschutz himself are deeply involved. So I am not counting it out.

The biggest public battle downtown is over the homeless. The Supreme Court let stand a ruling that the city couldn't in many cases remove and destroy possessions left unattended by homeless people. CCA vigorously argues that the streets need to be clean. What city does it right?

New York. And it does it right because it spends a helluva lot more money. It is really shameful that more resources haven't been spent. The county has primary responsibility, the city secondary, but where are the feds? It's outrageous in this society. Our view is we need to house as many people as possible.

And New York doesn't have that concentration [of homeless] close to their midtown. They have smaller facilities where chronically homeless are housed, and they're dotted all over the landscape. You try to put a small building for the chronically homeless in West L.A. someplace; I don't have the energy or the fortitude or the time to fight with the neighbors. Before we had any real life downtown, everybody could shove all these problems here.

It's not just a question of housing the homeless. Some don't want to go into shelters, and they can't be forced to.

They have either a severe mental illness or a drug addiction or both. It can't just be a question of what they want; it imposes a public health risk. I don't know what the answer is, but we need to house everybody who can and will be housed. Advocates may be right that you have to keep coming at them over and over to get them inside, that sometimes that can take years.

You have to balance where they are and their rights with the rights of the community to be safe walking down the street. That's why the county told the city to clean it up. I believe New York does not allow them to keep stuff on the streets.

We've been told a lot of these guys are hoarders; they just pick stuff up and put it in their baskets. You need someone versed in mental illness to do outreach.

How do downtown residents feel about it?

I have never heard any resident [say], Let's just get rid of them. Everyone feels frustrated. Yet they want a safe, clean place to live and raise their kids.

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